It’s a great day to be invested in Sotera Health (NASDAQ:SHC). The company just received a favorable verdict from court. Now, SHC stock is jolting higher on the positive news, although shares aren’t necessarily out of the woods yet. More legal battles loom.
Sotera Health is a midsize company that supplies sterilization and lab testing services. In particular, there has been a great deal of controversy surrounding its Sterigenics unit this year. The Cook County Record, a local Illinois publication, reports that over 760 people have sued or are suing Sterigenics. Plaintiffs blame Sterigenics for “a range of cancers and other illnesses among people who live and work in and around suburban Willowbrook.”
Earlier this year, an Illinois jury sided against Sterigenics. The decision awarded $363 million to a woman because emissions from a Sterigenics plant may have contributed to her development of breast cancer. However, today’s more recent verdict actually favored Sterigenics and Sotera Health. Another woman with cancer reportedly “lived near Sterigenics’ former Willowbrook plant for decades,” but a jury in Cook County ruled that the company isn’t legally liable.
What’s Happening With SHC Stock?
SHC stock is running more than 35% higher this morning, breaking through the $8 level. Clearly, financial traders are pleased with the recently released verdict in favor of the company.
That’s understandable. But perhaps investors shouldn’t be too hasty to jump into the long side of this trade. Again, there are a bevy of lawsuits and potential cases against Sterigenics. This was only one of them.
Some of the allegations concern Sterigenics’ use of the chemical ethylene oxide (EtO). Plaintiffs have brought complaints regarding the potentially harmful effects of EtO emissions.
Traders might enjoy today’s relief rally, but this is an ongoing story. SHC stock could prove to be volatile over the coming weeks and months as Sterigenics and Sotera Health contest numerous allegations — and fight to salvage their reputation.
On the date of publication, David Moadel did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.